What it means
RBI’s income recognition, asset classification and provisioning (IRACP) norms decide when a loan stops being “standard”. Once overdue past 90 days it is an NPA: the lender stops counting unpaid interest as income and sets aside provisions. NPAs are further graded as substandard (NPA up to 12 months), doubtful and loss, with higher provisions at each step. Classification runs as part of the lender’s day-end process, borrower-wise, and an NPA returns to standard only when all arrears are paid.
Example
A borrower’s EMI of ₹10,634 was due on 5 Jul 2026 and is not paid.
| Date (day-end) | Status |
|---|---|
| 5 Jul 2026 | Overdue (SMA-0) |
| 4 Aug 2026 | SMA-1 |
| 3 Sep 2026 | SMA-2 |
| 3 Oct 2026 | NPA |
If the borrower pays only the July EMI in October, the account stays an NPA while August and September are still unpaid.
Common mistakes
- Upgrading an NPA after a part payment.
- Classifying one loan as NPA but not the borrower’s other loans.
- Recognising interest income on an NPA account.
In MyRecords
The Lending module’s loans board groups loans by RBI class, from standard through SMA to NPA, using each company’s day ranges. When a loan turns NPA, the borrower’s other running loans are marked too, and the Lending home shows the NPA total. Interest accrual, dues and repayments post to the ledger, with loan interest receivable kept apart from trade debtors.